Asian Citrus Interims show further good progress

AIM and Hong Kong listed, Asian Citrus Hldgs (LON:ACHL, 0073.HK), the China-based orange plantation owner, released their interims this week ^[1] providing some more compelling results and further cementing their position as the largest orange plantation owner and operator in China.

Asian Citrus is the largest orange plantation owner and operator in the PRC. It currently owns and operates two orange plantations: the Hepu Plantation in Hepu County in the Guangxi Zhuang Autonomous Region, occupying approximately 30.9 sq.km, and the Xinfeng Plantation in Xinfeng County in Jiangxi province, occupying approximately 37.1 sq.km. The plantations are located in similar latitudes to that of Florida of the US, which is well known for growing oranges. The Group cultivates and sells two types of oranges: winter (the varieties grown being Navel, Hamlin, Pineapple and Hong Jiang) and summer (principally Valencia).

Investors in Asian Citrus will be used to results like this, as they have been releasing similarly stellar results year after year since listing on AIM. For this reason, I am not going to talk about the growth they have achieved in the accounts or how they achieved them. Rather, I am going to focus on i) their balance sheet which has been further strengthened, and ii) the future prospects, focusing on whether these results can be sustained. 

Balance sheet

Asian Citrus’s balance sheet, like other parts of their business, seems to go from strength to strength. They have continually increased the current and non-current assets side while keeping the liability side to a negligible amount. In fact, the only real liability of note (they only have three) is trade payables. By the year end, this will likely be lower than the level when they listed (historically payables are high in the interim period than at the year-end). This is a quite a feat when compared to other companies. But it is over the last few years where their balance sheet has started to take off. Below are their non-current assets, current assets and liabilities totals: 

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